If a tree falls in a forest…

Most of the times a VC fund is considering an investment in a startup it will ask for a cohort analysis. Such an analysis is comparing different groups of users throughout time. As a company is building its product, it is constantly testing new strategies. Customers that start using an application in the first week after its launch will have a completely different experience from users that start using an application later in time. Cohort analysis aims to help entrepreneurs (and potential investors) to understand whether a company really improves throughout time. Lets look at a specific example and assume that we are analysing an e-commerce site. This website has 500 new buyers every month. In the majority of the pitch decks that are shared with VCs you would find a figure like the one below. The first impression from the figure above is that this specific…